Correlation Between Singapore Reinsurance and SANOK RUBBER
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance and SANOK RUBBER at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Singapore Reinsurance and SANOK RUBBER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and SANOK RUBBER ZY, you can compare the effects of market volatilities on Singapore Reinsurance and SANOK RUBBER and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Singapore Reinsurance with a short position of SANOK RUBBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and SANOK RUBBER.
Diversification Opportunities for Singapore Reinsurance and SANOK RUBBER
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Singapore and SANOK is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY and Singapore Reinsurance is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Singapore Reinsurance are associated (or correlated) with SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of Singapore Reinsurance i.e., Singapore Reinsurance and SANOK RUBBER go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and SANOK RUBBER
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 0.8 times more return on investment than SANOK RUBBER. However, Singapore Reinsurance is 1.25 times less risky than SANOK RUBBER. It trades about 0.12 of its potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.08 per unit of risk. If you would invest 2,460 in Singapore Reinsurance on August 29, 2024 and sell it today you would earn a total of 1,000.00 from holding Singapore Reinsurance or generate 40.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Reinsurance vs. SANOK RUBBER ZY
Performance |
| Timeline |
| Singapore Reinsurance |
| SANOK RUBBER ZY |
Singapore Reinsurance and SANOK RUBBER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Reinsurance and SANOK RUBBER
The main advantage of trading using opposite Singapore Reinsurance and SANOK RUBBER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance position performs unexpectedly, SANOK RUBBER can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SANOK RUBBER will offset losses from the drop in SANOK RUBBER's long position.| Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Superior Plus Corp | Singapore Reinsurance vs. SIVERS SEMICONDUCTORS AB |
| SANOK RUBBER vs. PT Astra International | SANOK RUBBER vs. Continental Aktiengesellschaft | SANOK RUBBER vs. Superior Plus Corp | SANOK RUBBER vs. NMI Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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